Economic Crime and Corporate Transparency Bill

Debate between Liam Byrne and Stephen Kinnock

Report stage
Wednesday 25th January 2023 Commons Chamber

[Liam Byrne]

I am grateful to my hon. Friend for making such a brilliant speech. Among the greatest victims of economic crime right now are the people of Ukraine. One virtue of his own proposal and the amendment tabled by the hon. Member for Huntingdon (Mr Djanogly) is that they propose a shift not just to freezing assets, but to seizing assets and recycling them into the reconstruction of Ukraine. Surely we should legislate for that work now and crack on with it forthwith.

[Stephen Kinnock]

As always, I agree absolutely with my right hon. Friend’s views on the matter. That cannot be beyond the wit of this place or the Government. I know there are legal complications around property and international law, but those are not insuperable. We cannot allow them to be insuperable because, with every day that passes, the people of Ukraine are suffering, and the barbaric acts of Vladimir Putin and his regime are not being held to account in a way that would contribute to the massive reconstruction effort that will be required for Ukraine. It is absolutely right that the person guilty of the crime should pay for the crime and that has to be the fundamental basis of our approach. We need urgency on this in the G20, the G7, and the United Nations. We need Ministers to get a grip of this issue so that we can do justice and deliver for the people of Ukraine, which we must do with great urgency.

--- Later in debate ---

[Stephen Kinnock]

No. This is based on a fund that is generated through fines and through accountability for those committing the crimes. It is along the lines of what I said about Ukraine: the people who commit the crime, rather than the victims, should be paying for the crime. How will we address that question now? If the Government think that the current system is absolutely fine and that there is justice and equity in the system, the Minister should come to the Dispatch Box and say that. However, if he thinks that there is a clear, principled and moral argument in favour of ensuring that the people who commit a crime should be made to pay for it, and that that should contribute to the compensation, we can have that conversation.

[Liam Byrne]

Is my hon. Friend scandalised as I am that at the moment only 40% of fines from economic criminals are recycled back into the business of tackling economic crime, whereas in the United States it is 100%?

--- Later in debate ---

[Liam Byrne]

I am incredibly grateful to the right hon. and learned Gentleman for his generosity in giving way. We appear to have an overload of rumness here.

[Stephen Kinnock]

Gallons of rum.

[Liam Byrne]

Yes. It is unusual for unity to break out on both sides of the House and on the Front and Back Benches. Given that ubiquity of unity, what, in the right hon. and learned Gentleman’s analysis, is the problem that is preventing these proposals from becoming the law of the land?

Economic Crime and Corporate Transparency Bill (Eighteenth sitting)

Debate between Liam Byrne and Stephen Kinnock

Committee stage
Thursday 24th November 2022 Public Bill Committees

[Stephen Kinnock]

I beg to move, That the clause be read a Second time.

New clause 53 would amend the wording of provisions in the Sanctions and Anti-Money Laundering Act 2018 to require the introduction of open registers of beneficial ownership in each of the UK’s overseas territories.

Some of the Committee’s Members are veterans of the struggle to incorporate the requirement into the 2018 Act and will no doubt recall that it was only thanks to the persistent effort of certain Back Benchers against the determined resistance of Ministers that the necessary amendment was ultimately made. It would be remiss of me not to pay particular tribute to the efforts on this issue of my right hon. Friend the Member for Barking. The Minister also deserves recognition for his advocacy on the need for transparency to be extended to the overseas territories, albeit in his previous incarnation as a Back-Bench Member of this House.

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

What has changed?

--- Later in debate ---

[Stephen Kinnock]

I thank the Minister for those points. We feel that it is a bit of a leap of faith but, on the basis of the assurances that he has given, I am happy to withdraw the clauses. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

New Clause 64

Disclosure of information in the public interest likely to be relevant to the investigation of economic crime

“(1) It is a defence to an action based on the disclosure or publication of information for the defendant to show that—

(a) the disclosure or publication complained of was likely to be relevant to the investigation of an economic crime, and

(b) the defendant reasonably believed that the disclosure or publication complained of was likely to be relevant to the investigation of an economic crime.

(2) Subject to subsection (3), in determining whether the defendant has shown the matters mentioned in subsection (1), the court must have regard to all the circumstances of the case.

(3) In determining whether it was reasonable for the defendant to believe that the disclosure or publication complained of was likely to be relevant to the investigation of an economic crime, the court must make such allowance for editorial judgement as it considers appropriate.

(4) For the avoidance of doubt, the defence under this section may be relied upon irrespective of whether the statement complained of is a statement of fact or a statement of opinion.”—(Liam Byrne.)

Brought up, and read the First time.

[Liam Byrne]

I beg to move, That the clause be read a Second time.

--- Later in debate ---

[Liam Byrne]

I meant, in summary, the economic effect. The impact is that agencies have much greater latitude to bring cases against bad people in American courts without fear of what it will do to their enforcement budget. That is exactly where we need our enforcement agencies to be. If we are going to strengthen their hand, to really effectively police the problem and to respect what the Government need to do, namely, to ensure that we maximise the effectiveness of our enforcement agencies within tight budgets, the measure should, I hope, be accepted by the Government. I am delighted to have had the opportunity to move the new clause.

[Stephen Kinnock]

I wish briefly to concur with my right hon. Friend’s every word. He has made a powerful case about unexplained wealth orders. That was something of a false dawn for the reasons he set out. Similar to what we said about SLAPPs, we are concerned about the chilling effect—the vast disparity between the financial firepower of the people that the UWOs seek to go after and that of the NCA and, frankly, the British state.

My right hon. Friend’s new clause would absolutely push the Bill in the right direction. It provides a means for us to level the playing field. On the basis of that common-sense proposal, we can start to have serious conversations about how to crack down on some of the kleptocrats. I thank my right hon. Friend for his clause and the manner in which he has proposed it. I hope that the Minister will seek to champion it rather than oppose it.

Economic Crime and Corporate Transparency Bill (Seventh sitting)

Debate between Liam Byrne and Stephen Kinnock

Committee stage
Thursday 3rd November 2022 Public Bill Committees

[Stephen Kinnock]

The hon. Lady raises an extremely important point and illustrates the absurdity of the situation we have got into. There seems to be a “wild west” approach to running corporate affairs in the UK and it is simply not acceptable. I thank her for that intervention and reiterate my hope that the Minister can give us an absolute reassurance that the issue of nominee directorships will be dealt with firmly and clearly in the Bill, without any loopholes. I also hope he will share any other thoughts he may have on the matter.

[Liam Byrne]

It is a pleasure to serve under your chairmanship, Ms Elliott. I am sorry that I have not checked the sartorial guidance for the Committee, but I assume it is okay for me to speak without a jacket on. I defer to the Chair if she wants me to clothe myself more adequately.

Economic Crime and Corporate Transparency Bill (First sitting)

Debate between Liam Byrne and Stephen Kinnock

Committee stage
Tuesday 25th October 2022 Public Bill Committees

[Liam Byrne]

Q So you would say to Members of Parliament who are worried about bad people transferring control of an economic asset to proxies that, at the moment, we do not have enough safeguards in the Bill.

Nick Van Benschoten: I think they could be improved, yes.

[Stephen Kinnock (Aberavon) (Lab)]

Q A couple of quick questions from me. First, on resourcing, the Bill puts a number of additional tasks, requirements and responsibilities on Companies House. How would you estimate the gap between where Companies House is now and where it would need to be if it were to properly implement and execute the Bill? Secondly, we have seen that a number of other jurisdictions—the Netherlands and Singapore in particular—have moved further and faster than the UK on data sharing. Do you think the Bill will bring us up to the gold standard for data sharing?

Nick Van Benschoten: Are you addressing the question to me?

--- Later in debate ---

[Stephen Kinnock]

Q Very diplomatically put. Would you agree that the Bill will not be worth the paper it is written on if the enforcement agencies are not properly resourced to do the job?

Nigel Kirby: I fully agree that we need enforcement to be properly resourced with the right capabilities to be able to deliver what it is asked to do.

[Liam Byrne]

Q Just to crystallise this, in your first answer, you described quite a simple layering exercise of money moving through five different banks, and you said that was a difficult problem to stop. Does this Bill help us stop that problem that you just described?

Nigel Kirby: Well, it does not stop that in the UK because our financial system launderers are in there, but what we can do is to prevent them from continuing to abuse the financial system. Take the example I gave with the five other banks—four were sending money—that were involved with Lloyds. The Bill will allow us to have a conversation with the four banks that were sending money into our companies, and to say “In relation to our responsibility for understanding due diligence, money laundering and so on, can we share information on those four companies so we can better understand those flows from those companies?” That is important, because some of them may have been legitimate and some may have been illegitimate, but that will help us to define the good from the bad in that particular space. It will also act as an alert trigger for those other four banks to have a look if they have not done so already.

An intelligence-led approach would say, “Lloyds has a concern about these four companies” and it could look further into the matter and do an investigation into its own relationship with its customer. The other element on all that money that came through to us—it was in the millions—that went out to a fifth bank, which I will call bank F, is that we could alert that bank about our money laundering concerns, provided we had exited those three companies, which we did. If that bank had not already picked it up with its transaction monitoring, it would have an intelligence-led trigger to be able to do its own investigations, and to stop that and report it to the authorities.

The final and important part of this is the indirect part—we call it the utility. The ability to better share this information for others is important because. If all those companies were exited out of the financial system by the five banks involved, it is highly likely that they would go on and open up accounts with other banks. This Bill gives us the opportunity to be alerted to that and to take the appropriate action and due diligence that we need.

Lawfare and UK Court System

Debate between Liam Byrne and Stephen Kinnock

Thursday 20th January 2022 Commons Chamber

[Liam Byrne (Birmingham, Hodge Hill) (Lab)]

It is a real privilege and an honour to follow the right hon. Member for Haltemprice and Howden (Mr Davis) to help open this debate and to follow on from his arguments.

“Follow the money” is the oldest and wisest advice given to journalists who are pursuing the corrupt, shining lights where they need to be shone and hunting the truth, yet this dictum, which has served us so well since Watergate, is now being smothered, suffocated and strangled in courts by allies, associates and friends of President Putin, who is pursuing a hybrid war against the west and against us. That is the context for the debate that we are holding this afternoon.

Many of us in this House have been warning for some years that it is time for this country to wake up to this new threat. Hybrid war is a novel kind of conflict. Once upon a time, wars were fought on land, in the air and at sea, but no more. Hybrid war is a battle for minds as much as it is for land—for influence and narrative, not simply territory. That means it extends the battlefront to space, to cyber-space and, now, to law space. It is fought with tweets as well as tanks, and now it is being fought with writs as one more weapon in the armoury. Of course, the reason for this is simple: what totalitarians, autocrats and kleptocrats fear most is the truth, so what they are seeking to do is to murder the truth, and we are letting them do it in English courts.

[Stephen Kinnock]

My right hon. Friend is making an excellent speech, and I congratulate him on securing this debate. On the point of cyber and hacking, is he aware of cases in which these Russian-backed interests are hacking people’s private data, leaking it and then suing them for libel, and does he agree that that is an utterly absurd and unacceptable position to be in?

[Liam Byrne]

My hon. Friend is absolutely right, and I will come on that in a moment.

The truth is that the truth is under attack by oligarchs with Russian connections because they are seeking to disguise the origin of their fortunes, their methods of business and, of course, their networks of friends. The result is that the frontline of this hybrid war now stetches from the streets of Donbass and Crimea and the troll farms of St Petersburg to the law courts of Britain—our courts, in England, here in London.

It was the Intelligence and Security Committee—whose distinguished Chair, theright hon. Member for New Forest East (Dr Lewis), is present—that made clear on, I believe, page 22 of its landmark report on Russia that the interests of Russian business are now so closely entwined with the interests of the Russian state that it is impossible to unravel them. It is these honourable folk who are now using English courts as their preferred location for the business of truth silencing. According to a survey of 63 journalistsin 41 countries, more cases were brought against journalists in the UK than in America and Europe combined.As theright hon. Member for Haltemprice and Howden said, the United States and Europe are now moving to shut this down, but we are not. That is why we are now becoming the global capital of the lawfare industry.

There are now so many cases that today we can reveal—it was evident in the right hon. Gentleman’s speech—what might be described as the oligarch’s playbook. Step one is to target the individual, not the organisation, because the individual is most vulnerable, and take aim at the slightest error. Arron Banks did not go for The Guardian or The Observer; he went for Carole Cadwalladr, and took aim at a single sentence in her TED talk. As we have heard, ENRC went after Tom Burgis personally after he flagged up the information that witnesses to its crimes were being murdered. Paul Radu, who happens to be Romanian, is being pursued in English courts by corrupt Azerbaijani politicians. We have to ask: why are powerful interests from far away suing journalists who are not English and do not write for English titles? Why are they being sued in English courts? Surely that must tell us that something in our country is going badly wrong.

Step two is to maximise intimidation, using covert surveillance if necessary. As we have heard, investigators and journalists are now being inundated with data subject access requests so that people who are up to no good can smoke out what they are up to. ENRC agents surveilled Tom Burgis, who was in a meeting that had been arranged on an encrypting messaging app; how on earth did it know about that? The Financial Times journalist Dan McCrum, who helped to break the Wirecard story, was subject to online abuse, hacking, electronic eavesdropping and physical surveillance. These people know no boundaries. They are completely out of control.

At one stage, I have been told, Elizabeth Denham, who was the Information Commissioner at the height of the Cambridge Analytica scandal, was warned by counter-terrorism officers that MI5 had evidence that she was under active intrusive surveillance ordered by Mr Arron Banks, so her office had to be swept. Others have told us about the “hack and leak” technique whereby systems are hacked into, and information is then leaked to serve as a trigger for defamation proceedings.

Step three is then to file the most ludicrously exaggerated claims. Mr Abramovich’s attack on Catherine Belton took completely out of context what Ms Belton had actually written. We know that Tom Burgis has been attacked because he is alleged to have said that a corporate entity had ordered the murders. There are extraordinary exaggerations and twisting of what has actually been written.

Step four is to co-ordinate the claims with others to maximise intimidation and, indeed, legal costs. Catherine Belton was subject to an onslaught first from the Alpha group, then from Abramovich, then from Mikhail Fridman, then from Shalva Chigirinsky, then from Pyotr Aven, and then from Rosneft—and we are being invited to believe that somehow this was unco-ordinated. They must think we are complete idiots.

Step five, as we have heard, is to file claims in multiple jurisdictions—an example is Mr Abramovich’s suit against HarperCollins in Australia—to maximise the cost for journalists, writers and their publishers. The impact is the creation of legal bills that are so big that they chill and kill the truth. Catherine Belton’s case cost well over £1.5 million, and it would have cost millions more if it had gone any further. Carole Cadwalladr’s case is costing hundreds of thousands of pounds. Major Karpov’s case against Bill Browder left Mr Browder with a bill of £600,000, which the plaintiff has not paid because when he lost his case, lo and behold, he subsequently disappeared.

Democracy’s watchdogs are having their tongues cut out and our writers are having their writing fingers broken. The result is that suspicion multiplies and the risk of corruption grows. I am so glad that the right hon. Member for Haltemprice and Howden has put before the House details of Mr Mohamed Amersi, which is a case in point. On Monday I shared intelligence with the House from sources inside the Kremlin and the Russian Government, including information about one of Mr Amersi’s business partners, a man called Leonard Bogdan, who sources tell me has “a definite FSB background.” I now learn that Mr Bogdan’s daughter works for the Conservative party’s central office and—surprise, surprise—was briefly secretary of Conservative Friends of the Middle East and North Africa.

We then learned, as the right hon. Gentleman said, that Mr Amersi’s associate, friend, colleague and lunching partner, Carl Hunter, threatened a former Member of Parliament, Charlotte Leslie, that without an apology to Mr Amersi the case had “all possibility of going further to a really gruesome stage.” What on earth is going on in this country when people like this are able to issue threats to anyone, never mind former Members of this House? And still Mr Amersi thinks he can go to a four-day trial and take Ms Leslie to court.

We still do not know the origin of Mr Banks’s donations to Leave.EU. When the Electoral Commission warned about the poor National Crime Agency investigation, Mr Banks sued the Electoral Commission and forced it to take down a statement about his lies. We have heard from regulators who fear judicial review because a subject access request might come in from representatives of organised crime groups that are seeking banking licences. This is complete madness. Perhaps there are perfectly innocent explanations for all this, and maybe I have too suspicious a mind, but I would like to know the truth. I want newspapers and investigators to be able to hunt down the truth and, where necessary, publish it.

That is why we need action and we need it now. We are still governed by the great European Magna Carta that we wrote in the 1950s, the European convention on human rights. It establishes a positive obligation to safeguard the freedom of a pluralist media and to create a favourable environment for participation in public debate. We are failing to uphold that duty.

It is not simply libel law being abused, as Bill Browder was attacked using cross-border insolvency legislation. We have heard how GDPR is now being misused by oligarchs. I was the shadow Minister on the Public Bill Committee on the Data Protection Act 2018, and I can expressly tell the House that it was not the intention of the previous Parliament for the Act to be used in this malicious way.

The new anti-corruption strategy and the economic crime plan that the Government have to refresh need to include five quick provisions. First, we need what are known as SLAPP-back laws so that a judge can rapidly dismiss a case if it is designated as strategic legal action against public participants. Secondly, we need a public figure defence, as America has, so a person who sues a public figure has a much higher bar to clear and needs to be able to prove actual malice. Thirdly, we need a sanctions regime against vexatious litigants, which could include paying 100% of costs or even punitive costs, to deter the misuse of our courts that we are now seeing. Fourthly, we need a defamation defence fund on the lines proposed by President Biden, and I humbly suggest that it should be funded by a windfall tax on the law firms making millions from the misuse of our courts.

Time and again, we have heard in our research about the behaviour of Hugh Tomlinson, Geraldine Proudler, Carter-Ruck, Mishcon de Reya, Schillings, CMS and Olswang, and it is now time for the regulatory body to pass new rules to ensure these firms follow a good model of litigation principles that ensures rules of good conduct and even liability for clients who refuse to pay their bills when they lose their case, like Major Karpov.